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How a 5-year Revenue Strategy overhaul revitalised NH Hotel Group

by Sarah McCay Tams, Contributing Editor, EMEA |

At the start of 2014, NH Hotel Group rolled out a five-year plan for its Revenue Strategy focused on brand segmentation, repositioning and asset rotation, efficiency, and IT systems transformation.

The plan has 24 initiatives. Central to the project was a complete overhaul of the website, changes to the hotel management platform and centralised booking system, and the introduction of a new loyalty programme — NH Hotel Group Rewards — all of which have been implemented.

Halfway through the five-year plan and already the results are filtering through.

“The success in the NH Hotel Group has been how the whole company has been able to focus on our five-year plan,” said Fernando Vives, the company’s senior vice president of commercial strategy and pricing. “We have clear goals to work toward. I can name the 24 initiatives by heart. If you meet any NH hotel members of staff, they would know the five-year plan and the objectives.”

The company keeps all its team members apprised of the five-year project’s objectives through a weekly newsletter called, “Tell the World.” NH Hotel Group uses the newsletter to share details of new initiatives and success stories.

“These are shared by people in the management committee, who are the owners of those initiatives, as well as those who are leading it from a property level,” Vives said. “You see the progress and the approach.”

We caught up with Fernando to learn more about the NH Hotel Group’s approach to change management.

FernandoViveslogosnombreHow important it is for senior management and owners to lead the change and encourage an environment for change?

To be managed and led by top professionals is what makes the difference and enables us to execute the change.

You can define the strategy, but what is important is the vision and how you execute that strategy, the values, the principles and the purpose. You can hire a band of consultants to put it together and make it look good on the PowerPoint, but what makes the difference is how it is executed and who is leading the change. As Henry Ford said, “Vision without execution is just hallucination.”

We have a top-to-bottom approach, which is understood by our people. After two years of working hard and investing, we have delivered our guidance for 2016, with a larger revenue base, better-positioned hotel portfolio and the significant improvement in perceived quality.

How important is preparation — having the right team and the right support — to really drive change?

If you don’t have the right people to define your strategy, it is unlikely you will be able to succeed. Aggressive goals give a return. Goals should always be aggressive, and this has been a step change in how the company is operating. The company has transformed to focus on what it will achieve in the future. We have the right people and the right mentality. You see people who have been with the company many years, and they are acting very fast, and then you see others who cannot adapt to the change and then there is a natural selection on who doesn’t fit with the project anymore.

When you step change and transform a company, you need spirit. When I first joined NH two years ago, I saw the speed with which we were making the decisions. You need to be agile, take risks, make mistakes, learn from those and make choices. If you have the right strategy and people, you will succeed. You need spirit; otherwise you will not be able to have that.

Some people will excel, others will not deliver with the same spirit, quality and level of engagement.

After two years of transformation, we have the right team, the best professionals, obsessed with delivering memorable experiences. They are what make NH Hotel Group different.

Most of your properties are in Europe. How does the European market’s fragmentation make it unique? And how can smaller hotel groups, such as NH Hotel Group, use that to adapt quickly to change?

In the U.S., 70% of hotels are part of the top five hotel chains. In Europe, it’s different. Hotels are leased or owned, so you can move faster. We own or lease more than 70% of our portfolio. If we want to change the PMS system in these hotels, for example, we don’t need to convince each hotel owner, because we rent or own these assets. The European market is also driven by the asset value of the hotels. This is another thing the hotel operator is looking at in Europe.

In the end, the hotel is a family-owned unit or small group of hotels or a European hotel group owning or leasing hotels. Because of this we can move faster while making change.

A business leader recently referred to his approach to business as “the clouds and the dust” — the clouds being the strategic framework, and the dust being the constant testing of ideas. It sounds like this is the case at NH? 

Yes. Sometimes what you think will work doesn’t work. But you have to have a strategy. You have to have a beacon to focus on, but then you always have to try new things.

The challenge is executing your strategy and managing the tactics to make you a leader in the future, all the while continuing to run the business.

NH Hotel Group is changing the ERP, PMS, CRS, CTM and revenue management systems in all 400 hotels over a two-year period as part of our transformation process. While this is going on, we still need to continue running the business.

SVP of @NHHotels: Vision, execution critical to #RevenueStrategy overhaul Click To Tweet

That’s a lot of change. How vital is the integration among your hotel applications?

We aim to understand the first and last step of the customer journey — and be in touch with the customers, if they want us to. We want them to join the loyalty programme, come back to our hotels. Our vision is that, when they are looking at a destination, we present a single image for the customer, so interaction needs to be complete.

Where does your hotel Revenue Strategy fit into all this?

At NH we are implementing the hotel revenue management of the future and not of today, and that is why we have probably one of the best revenue management teams in the industry. We have been working on this since the beginning of the five-year plan, to recruit and retain the best people.

We have full alignment between commercial, marketing and operations, with marketing influencing every level, from marketing tools and sales distribution, to revenue management. We need to partner with the best providers to execute that strategy — you need the enablers and they need to work together. If you don’t have the enablers then you cannot have the time to market. If you have your strategy and enablers, that is where you will create a competitive edge.

We have the right people, process and strategy, and we have partnered with the right enablers. Duetto plays a fantastic role. Everyone can provide software; what makes a difference is how you execute it. The strategy behind that is going to drive our success.

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Sarah McCay Tams, Contributing Editor, EMEA

Sarah McCay Tams, Contributing Editor, EMEA

Sarah is contributing editor covering Europe, Middle East & Africa (EMEA) for Duetto. An experienced B2B travel industry journalist, Sarah spent 14 years working in the Middle East, most notably as senior editor – hospitality for ITP Publishing Group in Dubai, where she headed up the editorial teams on Hotelier Middle East, Caterer Middle East and Arabian Travel News. Sarah is now based back in the UK.
Sarah McCay Tams, Contributing Editor, EMEA

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Sarah McCay Tams, Contributing Editor, EMEA

Sarah is contributing editor covering Europe, Middle East & Africa (EMEA) for Duetto. An experienced B2B travel industry journalist, Sarah spent 14 years working in the Middle East, most notably as senior editor – hospitality for ITP Publishing Group in Dubai, where she headed up the editorial teams on Hotelier Middle East, Caterer Middle East and Arabian Travel News. Sarah is now based back in the UK.